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Determinants of Poverty in Sub-Saharan Africa (Pp An International Multi-Disciplinary Journal, Ethiopia Vol. 3 (2), January, 2009 ISSN 1994-9057 (Print) ISSN 2070-0083 (Online) Determinants of Poverty in Sub-Saharan Africa (Pp. 162-177) Sidikat L. Adeyemi - Associate Professor and a Lecturer in the Department of Business Administration, University of Ilorin, Nigeria Gafar T. Ijaiya - A Poverty Analyst and Lecturer in Development Economics at the Department of Economics, University of Ilorin, Nigeria. Usman A. Raheem - Department of Geography, University of Ilorin, Nigeria Abstract This paper examines the determinants of poverty in Sub-Saharan Africa using a set of cross-country data drawn from 48 countries. It adopts a multiple regression analysis. The results obtained indicates that factors like increase in the rate of population, inflation and external debt servicing, lack of safe water, low economic activities, gender discrimination, ethnic and religious conflicts and HIV/AIDS have influenced the increase in the rate poverty in the sub-region. Given these results, measures such as debt forgiveness, use of family planning devices, stable macro-economic variables like inflation and exchange rate volatility and good governance are suggested as possible solutions to poverty in Sub-Saharan Africa. Introduction Achieving the Millennium Development Goal of eradicating extreme poverty and hunger before 2015 seems to be a mirage in Sub-Saharan Africa. This is against the backdrop of a number of factors, such as, macroeconomic instability e.g. increase in the rate of inflation and exchange rate instability; socio-political instability (e.g. ethnic/religion and civil conflicts), external Copyright: IAARR, 2009 www.afrrevjo.com 162 Indexed African Journals Online: www.ajol.info African Research Review Vol. 3 (2), January, 2009. Pp. 162-177 debt burdens, adult illiteracy, lack of social services (e.g. health care, safe water and sanitation) and HIV/AIDS that have continued to reverse development initiatives and efforts. These and other factors has made the sub-region one of the poorest in the world with 46.4 percent of its people living on less than $1 a day in 2001 (World Bank 2005a, 2005b). The consequences of this situation include among others: low life expectancy at birth, increase in mortality rate (infant and maternal), increase in malnutrition and high incidence of HIV/AIDS. For instance, the average life expectancy at birth in Sub-Saharan Africa was 40 years in 2003, far below the rates in South Asia and Europe that had 63 years and 79 years respectively in the same year (UNDP 2003; GCA 2005; World Bank 2005a, 2005b). Governments and donor agencies in Africa therefore need to evolve policy reforms that geared towards tackling poverty from the root of its occurrence. In other words, a blow-by-blow account of factors that lead to poverty in the region must be obtained so as to provide direction for such reforms, other wise policies will be targeted randomly without an idea of which factors(s) is/are stronger at causing or aggravating levels and severity of poverty among the people of the Sub-Saharan African region. Drawing from the above scenario, the aim of this paper therefore, is to examine the relative contributions of selected micro and macroeconomic variables on the level of poverty as observed in Sub-Saharan Africa, using a set of cross-country data and a multiple regression analysis. Conceptual Issue: Poverty Meaning and Measurement of Poverty Poverty can be defined as lack of material well-being, insecurity, social isolation, psychological distress, lack of freedom of choice and action, unpredictability, lack of long-term planning horizons because the poor can not see how to survive in the present, low self confidence and not believing in one self (Narayan 2000) Sengupta (2003) defined poverty as not only an insufficient income to buy a minimum basket of goods and services but as the lack of basic capabilities to live in dignity. This definition recognizes poverty’s broader features, such as hunger, poor education, discrimination, vulnerability and social exclusion. In the light of the International Bill of Copyright: IAARR, 2009 www.afrrevjo.com 163 Indexed African Journals Online: www.ajol.info Determinants of Poverty in Sub-Saharan Africa Rights, poverty is defined as a human condition characterized by sustained or chronic deprivation of the resources, capabilities, choices, security and power necessary for the enjoyment of an adequate standard of living and other civil, cultural, economic, political and social rights ( see also Sen 1985; UN 2001; Hunt, et.al 2004). As observed by Kankwanda, et.al (2000) poverty is either absolute or relative or both. Absolute poverty being that which could be applied at all time in all societies, such as the level of income necessary for bare subsistence, while relative poverty relates to the living standard of the poor to the standards that prevail elsewhere in the society in which they live. Related to the definition of poverty are the measurements of poverty whose importance is to know who is poor, how many people are poor, and where the poor are located. According to Foster, et.al (1984), the most frequently used measurements are: (i) the head count poverty index given by the percentage of the population that live in the household with a consumption per capita less than the poverty line; (ii) poverty gap index which reflects the depth of poverty by taking into account how far the average poor persons’ income is from the poverty line; and (iii) the distributionally sensitive measure of squared poverty gap defined as the means of the squared proportionate poverty gap which reflects the severity of poverty. Studies by UNDP also advocate the use of Human Development Index (HDI) and Capability Poverty Measure (CPM). According to UNDP (various issues) HDI combines three components in the measure of poverty which include: longevity as measured by life expectancy at birth; educational attainment as measured by a combination of adult literacy (two-thirds weight) and combined primary, secondary and tertiary enrolment ratios (one- third weight); and improvement in standard of living as measured by real GDP per capita income (PPP$). The first relates to survival - vulnerability to death at a relatively early age. The second relates to knowledge – being excluded from the world of reading and communication. The third relates to a decent living standard in terms of overall economic provisioning. On the other hand, CPM focuses on the average state of peoples’ capabilities by reflecting on the percentage of people who lack basic or minimally essential human capabilities that are ends in themselves, needed to lift one from Copyright: IAARR, 2009 www.afrrevjo.com 164 Indexed African Journals Online: www.ajol.info African Research Review Vol. 3 (2), January, 2009. Pp. 162-177 income poverty and sustain strong human development. A situation further stressed by Sen (1985) as not what people posses, but what their possession enable them to do. Determinants of Poverty According to the World Bank (1990), and the United Nations (1995), poverty has various manifestations which include the lack of income and productive resources sufficient to ensure sustainable livelihood, hunger, and malnutrition, ill health, limited or lack of access to education and other basic services, increased morbidity and mortality from illness, homelessness, inadequate, unsafe and degraded environment, social discrimination and exclusion. It is also characterized by lack of participation in decision making in civil, social and cultural life (see World Bank 2001). Yahie (1993) reiterates that the factors that cause poverty include: (i) structural causes that are more permanent and depend on a host of exogenous factors such as limited resources, lack of skills, locational disadvantage and other factors that are inherent in the social and political set-up; and (ii) the transitional causes that are mainly due to structural adjustment reforms and changes in domestic economic policies that may result in price changes, unemployment and so on. Natural calamities such as drought and man-made disasters such as wars, environmental degradation and so on also induce transitional poverty. (see Narayan et.al. 2000a, 2000b). In their discussions of the factors that cause poverty, de Haan (2000) and Sindzingre (2000) note that poverty could also be caused by general exclusion of the people from social life. To them exclusion reflects discrimination, which is a process that denies individuals from full participation in material exchange or interaction. The concept is tied to exclusion from the labour market, long-term unemployment and the destruction of the social links and integration that usually accompany work. The definition also widens to include precariousness, vulnerable and insecurity (especially that of employment) and exclusion from social life. As observed by Obadan (1997) in Sub-Saharan Africa, the main factors that cause poverty include: inadequate access to employment opportunities; inadequate physical assets such as land, capital and minimal access by the poor to credit even on a small scale; inadequate access to the means of supporting rural development in poor regions; inadequate access to markets Copyright: IAARR, 2009 www.afrrevjo.com 165 Indexed African Journals Online: www.ajol.info Determinants of Poverty in Sub-Saharan Africa where the poor can sell goods and services; low endowment of human capital, destruction of natural resources leading to environmental degradation and reduced productivity; inadequate access to assistance for those living at the margin and those victimized by transitory poverty and lack of participation. That is, failure to draw the poor into the design of development programmes. The Poverty Situation in Sub-Saharan Africa The poverty situation in Sub-Saharan African countries is precarious given the percentage of people living below $ 1 a day (45 percent), moreso, when compared with other regions of the world. The poverty situation also depicts country variations with countries like Uganda, Mali, Nigeria, Zambia, Niger, Madagascar, Zimbabwe, Burundi and Rwanda having more than 50 percent of their population living below $ 1 a day in 2002.
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